Tesla has announced a new deal to build a Megafactory in Shanghai, China, to build energy storage products in the market.

Last year, Tesla launched its first ‘Megafactory’ in California.

The plant is dedicated to producing Megapacks, a large battery system used in large-scale energy storage projects for electric utilities around the world.

It is supplementing production from Gigafactory Nevada and adding a capacity of up to 40 GWh annually – more than the global capacity of stationary energy storage.

Despite that new capacity, Tesla still has about a two-year-long backlog of orders for Megapack as the product has become the go-to for electric utilities wanting to deploy energy storage at a large scale to either stabilize their grid or take better advantage of renewable energy, like solar power.

Now Tesla is adding even more capacity with the announcement of a new Megafactory in China:

The project appears to be a complete copy of the Megafactory in California with a capacity of 10,000 Megapacks per year or about 40 GWh.

Tesla also plans to build the factory at an incredible pace, like it did in Lathrop, with construction starting next quarter and production aimed to start in Q2 2024.

The company has indicated that it plans to export the Megapacks built in China worldwide. It will enable Tesla to have production hubs for the critical energy product on both sides of the world.

Tesla CEO Elon Musk is in China this weekend, seemingly to close that deal and meet with government officials. There have been rumors that Tesla also aims to secure a deal to release its Full Self-Driving Beta in the market.